Makino Q2 FY2027: Operating profit surges 86% as orders grow

Makino’s first-half revenue increased 22.3% year on year, operating profit rose 85.7% and net income attributable to owners of the parent climbed 102.4%. Ordinary profit gained 70.9% to ¥17.999 billion. A sharp increase in orders helped drive earnings growth, with profit rising faster than revenue.

• Orders: First-half orders rose 42.2% year on year to ¥177.939 billion, as demand for capital investment increased in North America, China-led Asia and Japan.
• Demand: Orders grew mainly for aerospace and semiconductor manufacturing equipment-related work. Parts machining for automotive and energy applications also remained firm.
• Profit growth: Gross profit increased to ¥49.963 billion from ¥36.291 billion a year earlier. Selling, general and administrative expenses also rose, but operating profit still increased.

Strong demand was also reflected in the order backlog, which stood at ¥142.181 billion at the end of September, up 32.7% year on year. Production and delivery schedules, and whether capital investment demand persists, will be key to watch in the second half.

Revenue grew strongly in the Americas and Europe, while Japan and Asia also exceeded the year-earlier period. The year-on-year figures below are based on sales to external customers.

Japan (Segment I): Sales to external customers were higher than a year earlier. Demand increased for parts machining used in semiconductor manufacturing equipment and energy-related applications, while aerospace-related business remained firm.

Asia (Segment II): Sales to external customers increased year on year. In China, demand remained firm for parts machining used in semiconductor manufacturing equipment and hydraulic equipment. In India, automotive, semiconductor manufacturing equipment and aircraft-related business grew. Semiconductor manufacturing equipment-related demand also held steady in ASEAN.

Americas (Segment III): Aerospace-related business was strong, and parts machining for automotive and medical applications was on an upward trend. At IMTS2026 in Chicago, Makino showcased machines including five-axis models and secured more business discussions than at the previous show.

Europe (Segment IV): Sales to external customers rose sharply year on year. At AMB2026 in Germany, Makino presented five-axis machines, large models for aerospace and automation solutions. The segment narrowed its loss, but returning to profitability remains a challenge.

Turning discussions at overseas trade shows into orders, and offering products that meet demand in aerospace and semiconductors, will be key to growth. The focus is on whether new products and automation proposals can support both order growth and improved margins.

Total assets stood at ¥452,998 million at the end of September, up ¥29,972 million from the previous fiscal year-end. The equity ratio fell to 59.2% from 61.7% at the previous year-end.

Operating cash flow was below the year-earlier level. Higher trade receivables and inventories weighed on cash, while spending on the acquisition of property, plant and equipment reached ¥9.7 billion as Makino continued to invest. Financing activities included ¥18 billion in proceeds from long-term borrowings.

Makino split its shares five-for-one on Oct. 1. The interim dividend of ¥160 was stated on a pre-split basis, while the forecast year-end dividend of ¥36 is on a post-split basis. The annual forecast is equivalent to ¥68 after the split, or ¥340 on a pre-split basis, above the previous year’s ¥270 pre-split dividend. Spending on share repurchases was ¥2.205 billion.

Makino revised its FY2027 earnings forecast, which was announced on April 30, 2026. The company now expects revenue of ¥306 billion, operating profit of ¥36.3 billion and net income attributable to owners of the parent of ¥29 billion, all higher than the previous year.

For details of the changes from the previous forecast and the reasons for the revision, the company directed readers to a separate announcement released the same day, titled “Differences Between Forecast and Actual Results for the Second Quarter (First Half) and Revisions to Full-Year Earnings Forecast.” The earnings release itself does not provide the size or reasons for the revision.

Orders rose sharply in the first half, and the order backlog at the end of September was also higher than a year earlier. Results could still vary depending on when orders are recognized as sales, exchange rates and the durability of capital investment. Investors will want to monitor second-half deliveries and the details of the company’s separate revision announcement.

Makino is broadening its machine lineup and strengthening proposals that include automation. At JIMTOF2026, the company exhibited the latest V600 vertical machining center and the a630iT five-axis horizontal machining center, making its first showing in Japan.

• V600: The latest model in the V series for die and mold applications. It expands the machining area while reducing floor space by 16% compared with the previous model.
• Automation proposals: Used with MAS-μCX automation support software, the system aims to reduce labor in peripheral tasks such as scheduling and machine-status monitoring.
• a630iT: A medium-sized five-axis horizontal machining center designed to address a broad range of machining needs, including aerospace and power generation.

Makino plans to go beyond selling individual machines by offering solutions to machining challenges and labor-saving needs. A key growth question is whether higher orders can translate into sustained demand for higher-value products and automation solutions.

Orders increased across regions in the first half, but machine-tool demand depends on customers’ capital investment plans and delivery timing. Makino has also said its earnings forecast is based on certain assumptions and actual results may vary due to various factors.

• Capital investment fluctuations: Weaker demand for capital investment in North America, China, Asia or Japan could affect orders and the conversion of the backlog into sales.
• Industry demand concentration: Orders are growing in aerospace and semiconductor manufacturing equipment-related markets. Changes in investment plans in these industries could alter the pace of demand.
• Currency fluctuations: Foreign exchange losses increased to ¥494 million from ¥224 million a year earlier. Currency movements affect non-operating income and expenses, as well as the yen value of overseas business.
• Funding needs and delivery progress: Operating cash flow was lower than a year earlier as inventories and trade receivables increased. Makino will need to convert orders into sales and collections while managing capital investment and working capital.